Wall Street report: Tuesday close

THE biggest four-day Blue Chip bull run in 70 years was brought up short by a cranky consumer.

The Dow Jones Industrial Average, which had soared 1180 points since last Wednesday in the most intense rally since 1933, surrendered 31.85 points or 0.37% to 8680.03. The Nasdaq Index managed a gain of 8.94 points or 0.67% to 1344.19.

Analysts said profit-taking was predictable given the magnitude of the rally since last Wednesday, when the Dow touched a four-year low and the Nasdaq hit its lowest since 1997.

Investors found a reason for taking a pause in the latest figures on consumer confidence, which hinted that the economy could be hurt by the enormous loss of wealth recently in the stock market.

The Conference Board, the New York-based private research organisation, said its consumer confidence index dropped to 97.1 in July from 106.3 in June, its lowest level since February. The month-to-month drop was the biggest since last October. Consumers were much less optimistic about the future, with jobs more difficult to find.

'The continued declines in the value of stock market portfolios, coupled with ongoing reports of corporate scandals, have taken a toll on consumer confidence,' said Lynn Franco, head of the Board's consumer research. 'A continued slide could very well jeopardize the economic recovery.'

Economists have warned that a drop in consumer confidence could prove a self-fulfilling prophecy by dampening consumer and investor enthusiasm. With personal consumption comprising two-thirds of the economy, a retreat from the shopping malls could cause the economy to contract, pinching company profits and driving down share prices.

Blue-chips were mostly lower, but losses were marginal relative to their recent gains. Boeing gave up 38 cents or 1% to $41.65, Coca-Cola shed $1.28 or 3% to $48.15 and DuPont slid $1.85 or 4.2% to $42.10.

Techs were mixed. Hewlett-Packard jumped 88 cents or 7% to $13.86. Intel was steady at $18.47. Microsoft was down a fraction at $48.10. IBM closed the regular trading session up 61 cents or 1% to $71.19 and traded down slightly in extended hours after announcing it would buy PriceWaterhouseCooper's consulting business for $3.5bn.

Merrill Lynch erased an early loss to close ahead marginally at $36.50 as Congressional hearings examined the firm's relationship with collapsed energy trader Enron. Citigroup rose 64 cents or 2% to $33.95 and JP Morgan lost 21 cents or 0.8% to $24.89 as their Enron dealings continued to receive attention.